Uber vs Shuttle, or Both?

It's not unheard of in recent years for small, medium and large dealerships to abandon their internal shuttle services in favour of going with Uber or other taxi services instead. On the face of things, letting a ride-hailing taxi service like Uber take care of transporting customers or your staff to and from the dealership is an attractive proposition.

The dealership doesn't have the expense of buying, running and maintaining a fleet of its own vehicles, it doesn’t have to worry about fuel consumption, and it sub-contracts the bulk of the organization of transport to an outside source. 

Unfortunately, like with most things in life, convenience comes at a price. Outsourcing customer transportation to Uber or other taxi services may appear attractive on the face of things, but dealerships that have done it are starting to realize how much more expensive it can be than running their own shuttle service.

During our research, while developing the Hop-Drop shuttle & valet management software, we spoke to the fixed-operation manager of a large dealer group that had been using Uber instead of running its own shuttle service for over 2 years. The manager confirmed that using Uber had turned out to be a lot more costly in purely financial terms than the alternative of running a properly optimized internal shuttle service. In fact, we were told by the group that runs 8 dealerships that the: "Uber cost is killing us, and customers still complain about their rides" 

That cost isn’t going to reduce anytime soon either. The cost of using an Uber is heavily subsidized at the moment to try and fight off competition from the likes of Lyft, but that position can not be sustainable in the long-term, so costs of using the service are only going to increase.

While interviewing multiple dealerships as we were developing the Hop-Drop platform, we learned that many had never really bothered to accurately track the total cost of the shuttle service they were offering. The result was that the cost usually tended to get mixed with other administrative costs and therefore didn’t stand out as an area where considerable savings could be made. Because dealerships typically don’t track the overall cost of their shuttle operation separately, it would be easy to make the mistake of thinking using Uber or other taxi services such as Lyft instead of an internal shuttle service would be cheaper. 

There is an old saying of "out of sight – out of mind" which is probably applicable here when it comes to why some dealerships have adopted the Uber option over running their own internal shuttle system. Dealerships – especially service departments – have enough to worry about keeping customers happy. If they can take one headache out of the equation, such as customer transportation, surely that's a good thing, right?

Owning the Experience

Well, not necessarily. Look at it from the customer's point of view. When they make a booking for their vehicle to be serviced or fixed with a dealership, everything that happens from that point with the transaction will be seen by the customer as being the dealership's responsibility. A customer doesn’t care if some part of the experience is being taken care of by a subcontractor; it's all up to the dealership as far as they will be concerned.

If the taxi driver is late, it's the dealership's fault. If the driver of the vehicle that picks up or drops off the customer is rude, it's the dealership's fault. If a ride doesn’t turn up in a timely manner for the customer, it's still going to be the dealership's fault. If anything goes wrong, even if there is nothing the dealership could have done about it, it's the dealership's fault in the eyes of the customer, and rightly so.

The dealership is totally responsible for the whole customer experience, regardless of any mitigating circumstances, so why would a dealership risk their reputation in the hands of someone else? 

Some aspects of what a service department offers might need to be outsourced, such as painting and dent repairs if the dealership doesn’t have its own body shop. If opting for Uber over your own shuttle & valet service was massively cheaper for the dealership there might be a case to be made. However, when dealerships are finding that Uber works out to be considerably more expensive and it means putting their valuable reputation in the hands of another business and its employees, it doesn’t look like such a good idea after all.

Best of both worlds?

It would be inappropriate to suggest a dealership should shun something like Uber completely. Uber can be an extremely useful element of a flexible, integrated and optimized customer transportation system. Even if a dealership is running a tight ship with an efficient and highly organized internal shuttle & valet processes by using simple yet advanced solution like Hop-Drop, there will be times (hopefully) when ride demand will outstrip the supply of available shuttle drivers.

Drivers can be off sick, or shuttles can get caught up in traffic. None of that is a good look for a service centre, so having a backup plan in place would be the smart thing to do. Using Uber if and when required can be done anytime by anyone with an account and a smartphone, but the whole thing would be a lot more efficient and professional if Uber was integrated into the software used to run and monitor your internal shuttle & valet program. All that and much much more can be done with the Hop-Drop trip optimization platform.

Anyway, if you think about it in some detail, using Uber doesn’t allow a dealership to abdicate all aspects of customer transportation and its associated overhead costs in any case. The dealership will still need someone to coordinate pick-ups and drop-offs, and the dealership will still need to have drivers and vehicles for other tasks. 

When a shuttle service isn’t run as effectively and efficiently as it could be in a dealership, the obvious need to keep service customers happy can sometimes take valuable resources away from other areas of the dealership that can prove to be incredibly costly.

Anyone who has ever worked in a dealership will have seen service advisors having to leave their post to help with pick-ups or drop-offs in emergencies, which can then lead to a situation where incoming calls take longer to answer or don’t get answered at all. Saving that one customer could lead to losing another or more, which obviously isn’t good business.

The same thing can happen with the sales department. Sales representatives can be drafted to do pick-ups and drop-offs before, after, or during work hours. This can lead to them coming in late, leaving work early, or having to leave the lot or showroom during the working day. It doesn’t take a college degree in advanced calculus to work out that missing a vehicle sale because a salesperson has been drafted in as a driver is going to be a big loss to the dealership's bottom line.


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